The Arabesque café in New Quebec Street, Marylebone, was found by council inspectors to be allowing punters to smoke tobacco on the ground floor and under a substantial canopy on numerous occasions between May 2010 and August 2012, breaking rules preventing smoking indoors. On another occasion they found customers actually smoking within the building after licensed hours.

Its former manager Anwar Majid was cautioned and four members of staff prosecuted for the breaches.

At a hearing on Thursday to review the café’s licence to operate, Westminster Council’s licensing sub committee heard neighbouring businesses and residents had also complained about noise nuisance and tobacco smoke at the premises.

The committee heard that since the offences, Mr Majid had been fired and replaced by Khalid Abbas and there had been no further infringements, and smoking would only be allowed under umbrellas outside the premises.

Committee chairman Cllr Tim Mitchell ruled that the council would take no further action in the case, but warned: “If there are any further breaches that break the law, it would lead to an injunction and that could mean criminal prosecution and ultimately imprisonment.

“Review hearings are costly and since they are met by taxpayers we are keen to prevent any further hearings.”